What’s The Difference Between Net Metering And Net Billing?
Understanding the world of solar energy can be overwhelming, especially when it comes to terms like net metering and net billing. But don’t worry! That’s what our team at Solar Bear Orlando is here for.
Central Florida homeowners need to understand these concepts and how they can impact their energy savings, so we’ve put this guide together to cut through the confusion.
What is Net Metering?
Essentially, net metering is a billing arrangement that allows homeowners to offset their energy costs by sending excess energy back to the grid and, in exchange, receiving credits from the utility company on their bill.
Think of it this way, if your system produces more energy than your home needs, you can send the surplus back to the grid, which is tracked by your utility provider. This means that your meter will run backward because you are feeding energy back into the grid. You will only pay for the net amount of electricity that you use.
What is Net Billing?
Net billing is a different way to get compensated for excess solar energy. Instead of running your meter backward, net billing gives homeowners a fixed compensation rate for any excess electricity that is sent back to the grid. This is usually at a wholesale rate.
This means that homeowners won’t receive a one-to-one credit for the energy that is produced, which also means that it can offer lower savings than net metering.
Key Differences
Let’s discuss these differences a little more:
Compensation Structure
- Net Metering: You receive credits at the retail rate for surplus energy.
- Net Billing: You are compensated at a lower wholesale rate.
Billing Process
- Net Metering: Your costs can be directly reduced if your meter runs backward.
- Net Billing: You get paid for extra energy sold to the utility.
Impact on Savings
- Net Metering: This offers greater savings as it directly credits your bill.
- Net Billing: Generally results in lower savings.
Which Is Better for Homeowners?
So, which scenario is best for Central Florida homeowners? Well, it depends. Net metering is offered by Duke Energy, which services many Orlando homes. This is a great option as it offers many financial benefits.
Duke Energy does not offer net billing, so in this case, it would not be an option for Orlando homeowners. It may be an option for others in Central Florida, though, depending on the offerings of their utility company.
Read More > What Extra Advantages Do Floridians Have with Solar?
Ready to Go Solar?
As you can see, going solar offers different financial benefits depending on what your utility company offers. If you have any questions or want to discuss your solar installation project, reach out to our friendly team here at Solar Bear Orlando at (727) 471-7442.
We’re excited to help you reach energy independence!